MUMBAI - Indian government bond yields ended marginally lower on Monday ahead of a heavy borrowing planned by states for the last week of the current financial year and the April-September borrowing calendar.
The 10-year benchmark 7.26% 2032 bond yield ended at 7.3035% after closing at 7.3128% on Friday.
"U.S. yields have come down, and hence local bond yields may also not rise much in coming times," said Raju Sharma, head of fixed income at IDBI Mutual Fund. "Traders will await state debt supply as well as first half borrowing calendar for cues."
Indian states aim to raise at least 407.14 billion rupees ($4.94 billion) through the sale of bonds on Tuesday, and the quantum is 70% higher than the planned schedule and also the highest ever by states for a single auction, according to traders.
Market participants also await the Indian government's borrowing calendar for April-September, which is likely to be released by the end of this week and provide further cues to the market.
The government's borrowing for the first half of the coming financial year is likely to be between 55% and 58% of its gross annual borrowing target of 15.43 trillion rupees, government officials told Reuters earlier this month.
Market participants also await the Reserve Bank of India's monetary policy decision, due on April 6.
While many market participants expect the central bank to go for one more 25 basis-point (bps) hike before a prolonged pause, State Bank of India Research expects a status quo on rates.
The RBI has raised the repo rate by 250 bps to 6.50% in the current financial year.
However, the RBI's stance could continue to be withdrawal of accommodation, even as liquidity is now in deficit mode and the central bank can always keep the options open in June policy, SBI Research added.
($1 = 82.3825 Indian rupees)
(Reporting by Bhakti Tambe; editing by Eileen Soreng)